U.S. Durable Goods Orders Increase 4.9% on Aircraft

Orders for U.S. goods meant to last several years jumped in July by the most in two years, stoked by a surge in demand for aircraft and communications equipment.

Bookings for durable goods climbed 4.9 percent, exceeding forecasts and the most since July 2007, the Commerce Department said today in Washington. Excluding transportation gear, orders increased 0.8 percent, a third consecutive gain.

The administration’s $3 billion “cash-for-clunkers” plan has revived sales, indicating manufacturers such as General Motors Co. and Ford Motor Co. may soon be flooded with orders to restock depleted inventories. That may also give related industries a jolt, leading to a factory rebound that will help the economy emerge from the worst recession since the 1930s.

“Industrial output is moving forward,” Jonathan Basile, an economist at Credit Suisse in New York, said before the report. “You’re going from stabilization to recovery. Companies need to buy more, they need to order more.”

Futures on the Standard & Poor’s 500 index were down 0.2 percent to 1,024.60 at 8:40 a.m. in New York.

Economists forecast durable goods orders would increase 3 percent after a previously reported 2.2 percent decline for June, according to the median of 72 projections in a Bloomberg News survey. Estimates ranged from gains of 0.7 percent to 8 percent.

Outside of transportation, bookings were expected to increase 0.9 percent, according to the Bloomberg survey.

Demand for aircraft, which is often volatile, surged 107 percent in July after falling 30 percent the prior month.